My most recent books are the Leader's Guide to Radical Management (2010), The Leader's Guide to Storytelling (2nd ed, 2011) and The Secret Language of Leadership (2007). I consult with organizations around the world on leadership, innovation, management and business narrative. At the World Bank, I held many management positions, including director of knowledge management (1996-2000). I am currently a director of the Scrum Alliance, an Amazon Affiliate and a fellow of the Lean Software Society. You can follow me on Twitter at @stevedenning. My website is at www.stevedenning.com.

3/16/2011 @ 11:10AM3,002 views

From Outputs To Outcomes: Part 5: Measuring Customer Delight in Real Time: Social Media

This article is the fifth and final part in a series of posts on measuring what matters in organizations: the shift from outputs to outcomes. Today the focus is on measuring customer delight in real time: social media.

In Part 1 of this series, I showed how to use the Net Promoter Score (NPS) to measure what has already happened to your business, in terms of client delight and outcomes. In parts 2-4 of this series, I showed how to deploy user stories to measure the inputs that will generate client delight in the future. In this part, I look at how social media can be used to measure what is currently happening in terms of client delight in your business.

Social media has changed everything. The explosion of social media from practically nothing five years ago, to over 500 millions participants has created major threats to traditional management that is focused on outputs and making money, as well as major opportunities for organizations that are committed on delighting their customers by generating positive outcomes.

The threat of social media

“Customers know everything about your company,” wrote Christopher Meyer and Julia Kirby in Harvard Business Review in April 2010. “That has changed the rules of business forever.” When customers know everything, it becomes important that management be equally informed, particularly when customers have the ability to videotape the experience and transmit it potentially to millions of other customers. Most traditionally-managed firms are just one YouTube video away from a major brand disaster.

Consider the following examples.

In 2008, when United Airlines broke Dave Carroll’s guitar, he made a singing YouTube video that told the story of the incident; the video has now been viewed by more than 8 million people.

In 2008, when a mother took offence at a commercial for the pain reliever Motrin that implied, in her eyes, that mothers were wearing baby slings simply to be fashionable, she was able to launch a “Motrin Moms” protest movement, that within two days became the most popular subject on Twitter.

In 2008, when Howard Schultz came back to be CEO of Starbucks, he woke up one morning to find around a hundred emails in his inbox. It turned out that this was the result of a sensational story in the Sun newspaper in London about a piece of equipment that Schultz had never heard of. When his phone rang and a reporter asked him to comment, Schultz replied that he had no idea what it was. The reporter advised him, “Google Starbucks real fast!” Schultz recalls: “We had a real problem. The lesson was that the world had changed. Something that happened in London had created a world-wide story that positioned Starbucks with venom and disrespect.”

These are just a couple of eye-opening illustrations of the revolution generated by sites like Twitter, Facebook and YouTube. The scale and rapidity of the ensuing public relations crises are astonishing.

The opportunities of social media

At the same time, the positive opportunities for organizations to use the power of social media for telling the story of their products and services are equally dramatic:

Procter & Gamble has used social media to reach otherwise unreachable customers when they helped create a community for teenage girls (beinggirl.com) that provides a friendly and helpful environment for them to converse and share stories, where the girls also learn about P&G’s feminine care products.

Ford has used social marketing to launch a new car—the Fiesta—without traditional advertizing by generating a massive “Fiesta Movement,” involving stories reflected in 6 million YouTube views, 740,000 views of Flickr photos and 3.7 million Twitter impressions.

In the last five years, the dynamic of marketing has been transformed. In 2005, the examples cited above could not have happened. Now social media have hundreds of million of participants, who can and do tell stories about the products and services that they use.

Unfortunately, traditional management will find itself ill-equipped to deal with these threats or take advantage of these opportunities, because its top-down command-and-control bureaucracy focused on transactions and outputs will be unable to engage in interactive conversations. To cope with social media, traditional managers will have to reinvent their management practices and commit themselves to delighting customers through interactive relationships and conversations, as discussed in an earlier post.

Using social media to measure customer delight

For those organizations that have cross the Rubicon into customer capitalism and have committed themselves to delighting their customers, social media give us the possibility of seeing what is happening in real time. The Net Promoter Score (NPS) can tell us what has happened quite rapidly, but it is still operating in terms of days and weeks. By contrast, social media can tell us what is happening in minutes and even seconds.

Social media give us the possibility of conducting controlled experiments to tackle the complex challenge of delighting customers. We can immediately see what the nature, intensity and scale of a response to an input on Twitter, Facebook, or a blog, and adjust course accordingly. We can see how many people respond to a particular input, whether the responses are positive or negative in tone, and whether the responses are passionate or lackluster. We can combine these findings with Net Promoter Scores to determine longer term trends.

As Charlene Li points out in her insightful book, Open Leadership, “having a common metric across the company provides not only a unified view but also a way to make consistent tradeoffs.” (p. 100)

However as she also points out, the ease with which we can now collect data creates the risk that we will drown in a sea of statistics. Before venturing into this territory, it thus becomes crucial to define objectives, identify the key performance indicators that bear on customer delight, identify the activities that are likely to influence those performance indicators, establish a baseline for those indicators, track the outcome of the indicators as activities are undertaken, and then adjust activities in the ensuring cycle of work.

A different way of managing

Here, as elsewhere, the individual tools that are used to measure outcomes are less important than the management mindsetthat deploys them. Effectively measuring time entails a wholly different way of thinking, speaking and acting in the workplace.

What we measure determines how we see the world. It enables us to see where we have come from, where we are now and where we could be heading. It’s the foundation of discovery. It expands our knowledge, defines our progress, and sparks new insights.

To learn more about the principles and practices of measuring outcomes so as to generate customer delight, read my book,The Leader’s Guide to Radical Management(Jossey-Bass, 2010) which provides a comprehensive overview of the principles and practices involved.

If you would like to get together with others who are intent on mastering what’s involved in measuring time, and creating a workplace of continuous innovation and customer delight, please join me, Rod Collins (author of Leadership in a Wiki World, Seth Kahan (author of Getting Change Right) and others for two days on May 12-13 in Washington DC. Cool, innovative and serious fun. More details here.

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